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Keystone XL Pipeline: Permit Issues and

Recent Developments



June 29, 2020


On May 25, 2020, TC Energy (previously named TransCanada) announced completion of the 1.4-mile
segment of the Keystone XL Pipeline crossing the U.S. border from Canada into Montana. The border
crossing was authorized under a 2019 Presidential Permit issued by President Trump, superseding a prior
Presidential Permit issued by the U.S. State Department in 2017. Although TC Energy was able to
construct this cross-border segment, a federal court decision on April 15, 2020, vacated and remanded the
pipeline's permit from the U.S. Army Corps of Engineers (Corps) to cross waterways and wetlands in the
United States. The decision effectively blocks construction of other pipeline segments, pending further
Corps action or successful judicial appeal. An overall decline in oil imports from Canada due to
Coronavirus Disease 2019 (COVID-19) also has reduced demand for oil pipeline transportation, at least
temporarily. Notwithstanding these setbacks, TC Energy expects to eventually receive all necessary
approvals and intends to construct the entire pipeline by 2023.


Keystone XL Pipeline Project

Keystone XL is intended to transport oil sands crude from western Canada, and shale oil from North
Dakota and Montana, to a hub in Nebraska for further delivery to Gulf Coast refineries (Figure 1). The
project is motivated by historically constrained oil pipeline capacity for Canadian exports, which has
depressed Western Canadian oil prices. Development of Keystone XL has been controversial. Pipeline
proponents argue for increasing U.S. oil supplies from a stable ally, which they argue offers economic
benefits, especially jobs. Opponents express concern about greenhouse gas emissions, continued U.S.
dependency on fossil fuels, and the environmental risk of an oil release.


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